News of the Coupon’s Death is Greatly Exaggerated
After reaching a peak of 4.6 billion redemptions in 1999 (according to Inmar), annual coupon use by US consumers sank to a low of 2.6 billion for the three-year average ending in 2008. However, as a result of an historic economic recession, coupon redemptions in the US increased 27% to about 3.3 billion. This marks the second-highest year-over-year growth in coupon redemption ever recorded, according to NCH Marketing.
Paperless Distribution Drives Growth
While newspaper inserts are still the primary method of coupon distribution (89%) and redemption (53%), internet redemption growth has skyrocketed, rising 263% in 2009. Other paperless coupon distribution methods, such as electronic checkout (39%), digital promotions (31%) and shelf pad (30%), also helped drive 2009’s significant growth in coupon redemptions.
Non-food Growth is Strong
Inmar reports that the majority of coupons were redeemed at conventional grocery stores (65%), but all classes of trade, dollar stores, mass merchandisers, convenience stores, military commissaries and drug stores, posted double-digit redemption growth.
Redemption growth outside of traditional food channels is a reflection of a coupon movement that started with food, but quickly turned to non-food in the second half of 2009. Non-food coupon redemption growth escalated from a rate of 9% in the first quarter to 46% in second quarter and continued growing throughout the year; rising 45% in third quarter and 37% in fourth quarter. A total of 1.2 billion non-food coupons were redeemed in 2009, representing one-third of all coupons.
Enthusiasts Play Key Role
All but the heaviest coupon user group experienced negative total unit growth (with and without a coupon). Eighty-three percent of units purchased with manufacturer coupons in 2009 were done so by just 22% of households. Coupon enthusiasts, the heaviest users, accounted for 65% of manufacturer coupon unit purchases and 18% of all unit purchases in 2009.
Enthusiasts drove a disproportionate amount of sales and sales growth, shopping more frequently, making 1.7 more trips than non-users and buying more (a rate 1.8 times greater annually).
Affluent Consumers Use More Coupons
More affluent households dominate coupon usage: 38% of “super heavy” users and 41% of “enthusiasts” come from households with incomes greater than $70,000. Households with income of $100,000 and up were the primary drivers of coupon growth in 2009. The enthusiast category also attracts a disproportionate number of households with incomes between $50,000 and $69,900. Households residing in affluent country and suburban areas are more likely to be heavier coupon users, while non-users are more apt to be those households living in rural areas and struggling urban core areas.
To explain these somewhat counterintuitive statistics, Nielsen quotes findings from Scarborough Research indicating that better educated and higher income households buy and read the newspaper more than others, and newspapers remain a key vehicle for delivering coupons. Furthermore, promotions are generally targeted in areas with more affluent consumers.
Women, Whites Also Use More Coupons
Beyond income levels, more than half (51%) of larger households (three or more members) are enthusiasts, while roughly one-third of non- and lighter coupon users are single-person households. Younger female households use coupons more, while male-only households use them less. Older users (65 and up) are also important “heavier” and “super” coupon users. All ethnic groups use coupons, but three-fourths of the average coupon enthusiasts are white.
February 2010 Coupon Traffic Rises Dramatically
Online coupon usage continues to climb in 2010, according to data from coupon aggregator RetailMeNot. February 2010 coupon traffic measured 12.8 million users, a 62% increase from 7.9 million users in February 2009. During the month, online coupon users generated about $32.9 million in sales, a 62% jump from $20.2 million in February 2009. There were 339,230 online coupons available for 58,667 retailers, and 56,486 printable coupons available for 52,000 stores.